(Cth) Exempt PALM Workers from the 35% DASP Tax

Author: Sara Abu Asbeh, Charlotte Retford, Paloma Hawkins, Lucy Lamb, Ruby Anderson | Publish date: 1/12/2025

Problem Identification: 

In Australia, Pacific Australia Labour Mobility (PALM) workers are taxed 35% on the superannuation they earn while working on temporary visas, through the Departing Australia Superannuation Payment (DASP).

Section 301-175(2) of the Income Tax Assessment Act 1997 (Cth) makes PALM workers ‘liable to pay income tax’ through the DASP. The rate is fixed at ‘35%’ by Section 5 of the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007 (Cth). 

According to the Australian Workers’ Union (AWU), this means ‘PALM workers’ super earnings are subject to double taxation’, as ‘[t]hey are first taxed at the standard rate of 15% upon deposit, then at 35%’ through DASP. AWU argued that this high rate means PALM workers, ‘who already face exploitation and abuse, are routinely let down by the settings of Superannuation for migrant workers.’ Further, the Australia Institute noted that the tax undermines Australia’s development goals in the Pacific Islands, as ‘Australia’s economy benefits more from their labour than their home countries’.’

Context: 

PALM refers to a scheme that employs workers from 9 Pacific Island Countries and Timor-Leste in eligible Australian industries (e.g. agriculture, aged care, hospitality, and tourism) to address labour shortages. The scheme is also known to strengthen Australia’s regional relationships through helping workers ‘develop skills, earn income and support [their] families’ and communities at home. 

DASP refers to the superannuation payment claimed by non-Australian citizens who worked in Australia on a temporary visa and have since left the country (including PALM workers). AWU have said it ‘typically results in [PALM workers] ceding around half their super earnings to the ATO – a rate equivalent to that paid by some of Australia’s highest earners.’

Arguments:

Experts from the Australia Institute have warned that workers being ‘overtaxed’ is harming Australia-Pacific Island relations, given the PALM scheme is a ‘key component’ of these ties. AWU National Secretary Paul Farrow stated that ‘[t]he PALM scheme is not just about sourcing labour, it's meant to engender good relations with our Pacific neighbours’. Fijian Prime Minister Sitiveni Rabuka voiced ‘deep concern’ that Fijian workers in the PALM scheme ‘are subject to substantial tax deductions’. AWU’s Secretary further noted ‘it's pretty tough to see how seizing 35 per cent of workers' superannuation is sending the right message’, whilst the Australia Institute said it’s ‘[n]o way to treat family’.

AWU has spotlighted that PALM scheme workers are taxed twice ‘to the hilt’, paying both a 35% DASP tax after already paying an initial 15% tax on their superannuation. For example, the Lowy Institute stated that the ‘average PALM worker in the horticulture industry would lose nearly $10,000 of their superannuation to the Australian Taxation Office.’ An article by the National Indigenous Times further reported that the taxes imposed on these workers ‘effectively claw back half of their earnings’. 

According to Dr Jessica Collins (Project Director of the Australia-Papua New Guinea Network with the Lowy Institute), abolishing the DASP tax for PALM scheme workers would not be a major monetary loss for the ATO. Dr Collins posited that ‘the tax was small fry for the government, but a huge loss to the Pacific's development and could be used to feed families.’

Advice/Solution Identification:

The Assistant Treasurer and the Minister for Pacific Island Affairs should amend Section 301-175(2) of the Income Tax Assessment Act 1997 (Cth) to introduce a DASP exemption for PALM workers. 

Researchers Ema Moolchand and Professor Shelley Marshall of the RMIT Business and Human Rights Centre, the AWU, and Dr Collins have called to exempt PALM scheme workers from the DASP tax. AWU argued that a taxation amendment would allow them to keep more of their ‘hard-earned savings’ and noted that the amendment of DASP tax policy is 'a low-cost, high-value proposition.’

Precedent:

There is international precedent for Australia not requiring a tax on superannuation for foreign workers. New Zealand and Australia have a portable superannuation scheme, named the  Trans-Tasman Retirement Savings Portability Arrangement, which allows the transfer of superannuation held by the ATO to New Zealand KiwiSaver accounts, exempt from an additional departing Australia tax rate.

Download the 1-Page Brief Here - (Cth) Exempt PALM Workers from the 35% DASP Tax (1).pdf

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Public Support: 

1. Australian Workers’ Union

2. Dr Jessica Collins of the Lowy Institute

3. Ema Moolchand and Shelley Marshall of the RMIT Business and Human Rights Centre

Broadly Support: 

1. The Australia Institute (they have broadly stated a change in PALM superannuation processes would be beneficial, but have not explicitly called for legislative change).

News Coverage:

• ABC News - “Superannuation is sitting in Australia as PALM workers report barriers, delays in claiming their money”. The ABC reported that the PALM scheme’s superannuation process is flawed. By: Doug Dingwall and Tonga reporter Marian Kupu | Sat 6 July 2024 - Read the article here.

• ABC News - “Union calls for end to super tax for Pacific and Timor-Leste workers”. The article detailed the Australian Workers’ Union campaign to stop taxing superannuation at 35% for PALM scheme workers from the Pacific and Timor-Leste, arguing that the tax unfairly imposes significant barriers to accessing their entitlement. By: Kath Sullivan | Thu 24 Oct 2024 - Read the article here.

• National Indigenous Times - “‘Many millions' in unclaimed super for Pacific workers”. This article explored how PALM workers have faced ‘difficulties navigating Australia’s complex tax system’ as well as facing extra taxes ‘that effectively claw back half of their earnings’. By: Ben McKay | Wed 18 June 2025 - Read the article here.

• ABC Pacific - “Returning to the Pacific after working in Australia? Here's what you need to know about super”. The article serves as a guide to help PALM workers understand how to claim their superannuation, outlining the major hurdles they may face, including language barriers, limited internet access, and high tax rates of 35-45%. By: Seni Iasona | Tues 9 July 2024 - Read the article here.

Where to go to learn more: 

• Australian Workers’ Union - The union’s report evaluated that the 35% DASP tax prevents PALM workers from accessing the full value of their superannuation, making the rate unfair and warranting its legislative removal. Read the full report here. 

• The Australia Institute - The report argued that PALM workers face significant losses on their retirement savings because of the high 35% tax rate, leaving many out of pocket compared to Australian residents. Read the full report here.

• The RMIT Business and Human Rights Centre - The RMIT report recommended that the 35% DASP tax should be abolished through legislative reforms due to concerns of financial exploitation. Read the full report here.

• Income Tax Assessment Act 1997 (Cth) - The Act the brief proposed to modify. Section 301-175(2) makes PALM scheme workers liable to pay the DASP tax. Read the full act here.

Human Perspective: 

David, 28, came to Australia from Papua New Guinea hoping to earn enough through the PALM scheme to support his parents and help send his younger siblings to school. He spent months working long days on a regional farm in Queensland, often in harsh heat and unpredictable weather. But when the season ended, and he returned home, David discovered that nearly half of the superannuation he had earned had been taken in tax, first 15% while he was working, and then another 35% simply because he was a PALM worker. Seeing so much of his savings disappear felt devastating. He had kept every promise the scheme asked of him, yet the system took a share that was larger than he had ever expected. David struggled to explain to his family why the earnings he had worked so hard for had not made it home with him, and why the very tax settings meant to support workers like him had left him with so much less than he knew he deserved.

To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.

Conflict of interest/acknowledgment statement: 

N/A

Support 

If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com. 

Reference list: 

Australian Government. (n.d.). Welcome to the PALM scheme. Retrieved November 20, 2025, from https://www.palmscheme.gov.au 

Australian Government. (n.d.). Stories - PALM scheme. Retrieved November 20, 2025, from https://www.palmscheme.gov.au/stories 

Australian Taxation Office. (2024, June 3). Trans-Tasman retirement savings transfers: How you can transfer money between Australian super funds and New Zealand KiwiSaver schemes. Australian Government. Retrieved November 21, 2025, from https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/foreign-super-funds/trans-tasman-retirement-savings-transfers 

Australian Taxation Office. (2024, October 17). Departing Australia superannuation payment (DASP). Australian Government. Retrieved November 21, 2025, from https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp

Collins, J. (2024, May 3). Australia’s superannuation rules leave Pacific workers out of pocket: The government must reconsider its tax on the Pacific’s poorest. The Interpreter. Retrieved November 20, 2025, from https://www.lowyinstitute.org/the-interpreter/australia-s-superannuation-rules-leave-pacific-workers-out-pocket

Department of Foreign Affairs and Trade. (2025, March 7). Australia–Pacific regional development partnership plan 2025–2029. Australian Government. Retrieved November 21, 2025, from https://www.dfat.gov.au/sites/default/files/australia-pacific-regional-development-partnership-plan-2025-2029.pdf#page=8 

Dingwall, D., & Kupu, M. (2024, July 6). Superannuation is sitting in Australia as PALM workers report barriers, delays in claiming their money. ABC News. Retrieved November 20, 2025, from https://www.abc.net.au/news/2024-07-06/pacific-palm-workers-superannuation-barriers/104052754 

Harrington, M. (2025, June 13). A fair go for temporary workers from the Pacific. The Australia Institute. Retrieved November 20, 2025, from https://australiainstitute.org.au/post/a-fair-go-for-temporary-workers-from-the-pacific/ 

Iasona, S. (2024, July 9). Returning to the Pacific after working in Australia? Here’s what you need to know about super. ABC Pacific. Retrieved November 20, 2025, from https://www.abc.net.au/pacific/pacific-super-explainer-for-palm-workers/104070158 

Income Tax Assessment Act 1997 (Cth). https://www.legislation.gov.au/C2004A05138/latest/text/9 

Killen, G., Hawking, T., & Richardson, D. (2024). PALM visas, superannuation and tax: The Pacific-Australia Labour Mobility (PALM) scheme is often presented as being beneficial to all parties—Australia, Pacific workers, and those workers’ home countries. In reality, the benefits are weighted in favour of Australia. The Australia Institute. Retrieved November 20, 2025, from https://australiainstitute.org.au/wp-content/uploads/2024/11/P1731-Palm-tax-and-super-Web.pdf 

Killen, G., Hawking, T., & Richardson, D. (2024, November 15). Pacific labourers overtaxed and exploited in Australia. The Australia Institute. https://australiainstitute.org.au/post/pacific-labourers-overtaxed-and-exploited-in-australia/

McKay, B. (2025, June 18). ‘Many millions’ in unclaimed super for Pacific workers. National Indigenous Times. Retrieved November 20, 2025, from https://nit.com.au/18-06-2025/18611/many-millions-in-unclaimed-super-for-pacific-workers 

Moolchand, E., & Marshall, S. (2025). Meat the reality: Unpacking the exploitation of PALM scheme workers in Australia’s meat industry. (pp. 48). RMIT University Business and Human Rights Centre. Retrieved November 18, 2025, from https://www.rmit.edu.au/content/dam/rmit/au/en/research/networks-centres-groups/bhright/meat-the-reality-unpacking-the-exploitation-of-palm-scheme-workers-100225.pdf 

Sullivan, K. (2024, October 24). Union calls for end to super tax for Pacific and Timor-Leste workers. ABC News. Retrieved November 20, 2025, from https://www.abc.net.au/news/2024-10-24/union-wants-super-rethink-for-palm-workers/104506854

Superannuation (Departing Australia Superannuation Payments Tax) Act 2007 (Cth). https://www.legislation.gov.au/C2007A00013/latest/text 

The Australia Institute. (2024, November 13). No way to treat family: Pacific labourers overtaxed and exploited [Press release]. https://australiainstitute.org.au/post/no-way-to-treat-family-pacific-labourers-overtaxed-and-exploited/